Proposal in relation to a PLAN OF ARRANGEMENT between BRITISH-AMERICAN INSURANCE ...

103 Pages·2017·0.52 MB·English

Proposal in relation to a

PLAN OF ARRANGEMENT
(pursuant to the Plan of Arrangement (British-American Insurance Company Limited) Act, 2017)

between
BRITISH-AMERICAN INSURANCE COMPANY LIMITED
(Judicial Manager Appointed)
and its
PLAN CREDITORS
(as defined in the Plan of Arrangement)
THIS IS AN IMPORTANT DOCUMENT AND ALL PLAN CREDITORS SHOULD READ THIS
CAREFULLY BEFORE VOTING ON THE PLAN OF ARRANGEMENT APPEARING AT
PAGES 70 – 103. ANY QUESTIONS SHOULD BE DIRECTED TO
Anguilla - Toll Free: 1-855-218-9339
Antigua & Barbuda - Toll Free: 1-855-260-0422
Dominica – Local Number: 1-767-448-2070
Grenada - Toll Free: 1-855-303-8797
Montserrat - Toll Free: 1-855-821-0055
St. Lucia - Toll Free: 1-855-584-3122
St. Vincent & The Grenadines - Toll Free: 1-855-256-1448
St. Kitts & Nevis - Toll Free: 1-855-802-8332
UK – Toll Free: 0-800-014-8162
USA/Canada - Toll Free: 1-800-803-9079
If you prefer or are not resident in any of the locations listed above, please email
[email protected]
For updates regarding the Plan of Arrangement throughout the process, please visit:
www.kpmg.com/bs/baico

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IN THE MATTER OF BRITISH-AMERICAN INSURANCE COMPANY LIMITED
(JUDICIAL MANAGER APPOINTED)
__________________________________
NOTICE OF MEETING
___________________________________
NOTICE IS HEREBY GIVEN that by the Order dated 4 August 2017, the Supreme Court of The
Commonwealth of The Bahamas (“the Court”) has directed that a Meeting of Plan Creditors (as defined
in the Plan of Arrangement (“the Plan”) referred to below) of BRITISH-AMERICAN INSURANCE
COMPANY LIMITED (the "Company") be convened for the purpose of considering and if thought fit
approving (with or without modification) the Plan proposed to be made between the Company and its
Plan Creditors and that such Meeting will be held on 21 September 2017 at 10.00 local time (Atlantic
Standard Time, GMT-4). The Meeting comprises the Principal Meeting and the Sub-Meetings which will
all be classed as one meeting and will be held at the following locations:
Principal Meeting in St. Kitts & Nevis:
Eastern Caribbean Central Bank Headquarters, Pond Road, Basseterre, St. Kitts & Nevis, West Indies
Sub-Meetings in Antigua & Barbuda, Grenada and St. Vincent & the Grenadines:
Dean William Lake Cultural Centre, Upper St John’s Street, St John’s, Antigua & Barbuda
Grenada National Stadium, Queen’s Park, St. George’s, Grenada
Methodist Church Hall, Grenville Street, Kingstown, St. Vincent & the Grenadines
This Notice forms part of the Plan Documents along with a Voting and Claim Form. The Plan and related
documents are also available at the website www.kpmg.com/bs/baico
Plan Creditors may vote in person at the said Meeting or they may appoint another person, whether a Plan
Creditor or not, as their proxy to attend and vote in their stead. Plan Creditors also have the option to
appoint the Plan Chairman to vote on their behalf.
If returning the Voting and Claim Form in advance, it is requested that forms be returned to any one of
the addresses listed overleaf or by email to [email protected] by no later than 17.00 local time
(Atlantic Standard Time, GMT-4) on 20 September 2017 (the day prior to the Meeting).
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By the said Order the Court has directed that the Chairman of the Meeting shall be Sir Errol Allen, or in
his absence Juan M. Lopez, the Judicial Manager of the Company. The Court has directed the Chairman
to report the results of the said Meeting to the Court.
The said Plan will be subject to the Court granting a Sanction Order and then subsequently, the Plan and
Sanction Order being filed with the Registrar General’s Department in The Bahamas.
If you have any questions, please contact one of the helplines listed on page 2 or email
[email protected]
ADDRESSES TO RETURN FORMS TO
Please note, offices are open weekdays between the hours of 10.00-16.00 local time (Atlantic Standard
Time, GMT-4), other than the Dominica Office which is open on weekdays between 14.00-16.00.
Claudel Romney Brian Glasgow
c/o BDO Eastern Caribbean c/o Jean Kelsick
1st Floor MAICO Headquarters Kelsick & Kelsick
Cosley Drive Bladen House
The Valley Brades
Anguilla Montserrat

Cleveland Seaforth Lisa Taylor
c/o BDO Eastern Caribbean c/o British American Insurance Co. Ltd.
Cnr. Factory Road and Carnival Gardens Top floor Virginia Bradshaw building
P O Box 3109 (Opposite Basseterre police station)
St. John’s Cayon Street
Antigua Basseterre
St. Kitts
Frank Myers Frank Myers
c/o British American Insurance Co. Ltd. c/o BDO Eastern Caribbean
4 Cross Lane Morgan Building – Top Floor
Roseau L'Anse Road
Dominica Castries
St. Lucia
Reuben John Brian Glasgow
c/o British American Insurance Co. Ltd. c/o KPMG
Young Street First Floor National Insurance Services Headquarters
St. George’s Upper Bay Street,
Grenada P.O. 587,
Kingstown
St. Vincent & the Grenadines

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CONTENTS
Important Notice to Plan Creditors 6
Key dates and proposed timetable 7
Explanatory Statement 8
Contents of the Explanatory Statement 9
Definitions 10
Explanatory Statement 22
Appendices to the Explanatory Statement 62
Plan of Arrangement 70
Contents of the Plan of Arrangement 71
Definitions 72
Plan of Arrangement 84

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IMPORTANT NOTICE TO PLAN CREDITORS
This document has been prepared in connection with the proposed Plan of Arrangement (the “Plan”)
pursuant to the Plan of Arrangement (British-American Insurance Company Limited) Act, 2017 of The
Bahamas between British-American Insurance Company Limited (“the Company”) and its respective
Plan Creditors (as defined in the Plan).
In preparing this document, the Judicial Manager of the Company has relied upon information obtained
from the records of the Company. The Judicial Manager is unable to warrant that any of this information,
or any information provided by a third party, is accurate.
Unless otherwise indicated, the statements, opinions and information contained in this document are made
as at the date of this document and reflect the circumstances existing and the information of which the
Judicial Manager was aware at that time.
The Company has not authorised any person to make any representations concerning the Plan which are
inconsistent with the statements contained in this document. If any such representations are made, they
may not be relied upon as they have not been authorised by the Company or the Judicial Manager.
This Explanatory Statement contains a summary of the main provisions of the Plan. The Plan itself is set
out on pages 70 – 103.
None of the content of this document is intended to constitute legal, tax, financial or other professional
advice for Plan Creditors. Plan Creditors may wish to consider seeking advice before taking any action in
connection with the Plan.

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KEY DATES AND PROPOSED TIMETABLE

Ascertainment Date 8 September 2009
Directions Hearing*# 4 August 2017
Meeting to vote on Plan* 21 September 2017 (10 am)
Sanction Hearing*# 6 October 2017
Effective Date* 6 October 2017
Final Claims Submission Date* 15 November 2017
Earliest Distribution to Plan Creditors* Late November 2017

* These dates are subject to change and, as a result, all dates subsequent to these dates may also
change. In the event of adverse weather conditions the Meeting may be postponed. See page 35
for further details.
# The dates of hearings refer to the dates of hearings before the Supreme Court of the
Commonwealth of The Bahamas
Capitalised terms in this document are as defined in the Plan at pages 72 - 83 and in the Explanatory
Statement at pages 10 - 21

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EXPLANATORY STATEMENT
(pursuant to the Plan of Arrangement (British-American Insurance Company Limited) Act, 2017)
in respect of a
PLAN OF ARRANGEMENT
between
BRITISH-AMERICAN INSURANCE COMPANY LIMITED
(Judicial Manager appointed)
and its
PLAN CREDITORS
(as defined in the Plan of Arrangement)
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CONTENTS OF EXPLANATORY STATEMENT
1. Letter from the Judicial Manager to Plan Creditors explaining the Plan
1.1 Introduction 22
1.2 What is a Plan of Arrangement? 23
1.3 Who is a Plan Creditor? 24

1.4 Why have you been sent this document? 27
1.5 Why has this Plan been proposed? 27
1.6 What are the advantages and disadvantages of the Plan? 27
1.7 What should Plan Creditors do now? 29
1.8 What do you have to do with the Voting and Claim Form? 32
1.9 What happens when the Plan becomes effective? 35
1.10 What if you have a Disputed Plan Claim? 36
1.11 What will you receive if the Plan is approved? 37
1.12 What if you have already received payments in respect of your Plan Claim? 38
1.13 Recommendation of the Judicial Manager and the EC Officeholders 39

2. Background
2.1 History of the Company 41
2.2 Events leading to the appointment of the Judicial Manager and the EC Officeholders 41
2.3 Actions taken during the Judicial Management 43
2.4 Litigation 48

3. Financial Information
3.1 Financial Statement 50
3.2 Receipts and Payments 51

4. Key Plan provisions: a detailed explanation
4.1 Application of the Plan 56
4.2 Effect of the Plan and stay of Proceedings 56
4.3 Determination of Plan Claims by the Company 56
4.4 Distribution and completion of Final Claim Forms and Final Claims Submission Date 57
4.5 Plan Creditors with Insurance Contracts issued by the St. Lucia branch 58
4.6 Dispute Resolution Procedure 59
4.7 Currency and Manner of Payment 60
4.8 Termination of the Plan 61

5. Appendices
5.1 Curriculum vitae of the Chairman of the Meeting, Sir Errol Allen 63
5.2 Curriculum vitae of the Plan Adjudicator, Chester A. S. Hinkson 64
5.3 Group structure of the Company 65
5.4 List of publications 66
5.5 Contact details for Judicial Manager and EC Officeholders 68
5.6 Summary of Eckler Actuarial Report 69

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DEFINITIONS
In the Explanatory Statement, unless the context otherwise requires or otherwise expressly provides, the
following expressions shall bear the meaning set opposite them:
“Act” the Insurance Act 2005 of The Bahamas
“Annuity and Investment Contracts” Insurance Contracts which are defined as annuities
under section 2 of the Insurance Act, 2005 of The
Bahamas, namely policies under which BAICO
assumed the obligation to make, after the expiration of
a certain period or during a specified period, a
payment or a series of periodic payments to a
particular person, in exchange for a premium or series
of premiums paid to the insurer These include, but
are not limited to, policies identified by the Company
as Executive Flexible Premium Annuity Insurance
Contracts (“EFPA”), Flexible Premium Annuity
Insurance Contracts (“FPA”) and Flexible Premium
Annuity II Insurance Contracts (“FPAII”)
“ARP” the Annuity Relief Programme
“Appointment Order” the Order made by the Court placing the Company
into Judicial Management and appointing Juan (John)
M. Lopez as Judicial Manager
“ARP Payments” means any amount received by a Plan Creditor under
the ARP. The terms under which the ARP Payments
were made together with its funding and organisation
were managed by the ECCU Governments and not the
Judicial Manager or the EC Officeholders, whose role
was limited to facilitating the distribution of the
payments. Payments made under the ARP, in
accordance with the terms set out at the time payment
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